Chinese and Israeli companies are among international contractors who regularly bribe Kenyan officials to win lucrative multi-billion shilling public infrastructure contracts, a new report by global corruption watchdog Transparency International (TI) says.
TI says bribery of Kenyan officials has over the years continued unabated, partly because foreign governments are not enforcing the existing anti-bribery laws.
“While China has criminalised the bribery of foreign public officials, in line with obligations under the UN Convention against Corruption, there has been no known enforcement against foreign corrupt practices by its companies, citizens and or residents,” the TI says in the report, which seeks to assess progress of the Organisation for Economic Co-operation and Development’s (OECD) anti-bribery convention.
TI says Chinese bribery of foreign officials has continued despite the fact that its companies and individuals have been the subject of publicly reported investigations and charges in numerous countries, including Bangladesh, Ethiopia, Kenya, Sri Lanka, the United States and Zambia.
Samuel Kimeu, the TI Kenya executive director, said failure to act on reported corruption cases has become a matter of great concern given the high cost of irregularly awarded contracts. “Runaway graft in public contracting is robbing taxpayers of value for money in publicly funded projects because they mostly result in poor workmanship.
“This inaction has anchored corruption as the main driver of contracting systems in Kenya,” Mr Kimeu said, adding that many of the local contracts are being awarded to proxies who then transfer them to foreign companies at a fee resulting in exaggerated costing.
Kenya last year enacted a law criminalising bribery and with severe penalties, including a Sh5 million fine for convicted executives and a 10-year embargo on their firms.
The law, which is modelled on the UK’s Bribery Act, seeks to punish private sector bribery, especially in their dealings with government.
The OECD Anti-Bribery Convention establishes legally binding standards to criminalise bribery of foreign public officials in international business transactions and provides for a host of punitive measures for effectiveness.
Its anti-graft pact boasts of being the “the first and only international anti-corruption instrument focused on the ‘supply side’ of the bribery transactions.”
While singling out China as the “world’s leading exporter of corruption,” the TI insists stringent punishment of Chinese officials implicated in graft will change the trend.
“(China) should acknowledge the influence of its companies in terms of how they conduct business in foreign markets,” the TI report says.
Chinese firms have in recent years firmed their grip on cash-rich infrastructure contracts in Kenya, including various roads and the multi-billion shilling Standard Gauge Railway (SGR).
The report is expected to rekindle public debate on the procurement of Kenya’s mega infrastructure projects and whether such procurement produces value for money.
Legal documents in past and ongoing cases have often shown how some rogue Kenyan State employees manipulate the procurement law to inflate tender prices and line their pockets with huge sums of money in exchange for shady deals.
Kenya’s list of unresolved corruption cases involving foreign officials and companies includes the Independent Electoral and Boundaries Commission ‘chickengate’, Goodyear’s tyre deal, British American Tobacco’s “cigarette” scandal, among others.
Multiple Chinese companies are embroiled in contracting litigation in Kenyan courts.
Top Kenyan Transport ministry officials were recently in the spotlight for alleged involvement in shady procurement deals with an Israeli construction firm.
Investigators from the Israel Police on February 20, this year began probing former senior managers at Shikun & Binui, on suspicion that they were involved in bribery of public officials in Kenya to win lucrative tenders.
The probe saw Israeli investigators raid the company’s offices in Kenya and freeze some of its bank accounts.
In 2014, a four-year investigation by the United Kingdom’s Serious Fraud Office (SFO) into allegations of British firms dishing out bribes codenamed ‘chicken’ to Kenyan officials to secure deals, unearthed a multi-million-shilling corruption scam where local election officials pocketed millions of shillings in bribes to award lucrative printing contracts over a two-year period.
Under the Kenyan anti-bribery law, wheeler-dealers and “tenderpreneurs” convicted of giving, soliciting, receiving, or agreeing to receive a bribe face a Sh5 million fine and a 10-year jail term, coupled with a 10-year ban from holding any public office, company directorship or partner in any firm.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.